Question

In decision theory, which criterion assumes the decision-maker is pessimistic?

• A. Maximax criterion
• B. Minimax regret criterion
• C. Maximin criterion
• D. Expected value criterion

Hint:

Decision criteria: \[ \boxed{ \begin{aligned} \text{Maximax} &\rightarrow \text{Optimistic} \text{Maximin} &\rightarrow \text{Pessimistic} \text{Minimax Regret} &\rightarrow \text{Minimum regret} \end{aligned} } \]

Answer 1

The Correct Option is C

Step 1: Recall the Maximin criterion. The Maximin criterion assumes that the worst possible outcome for each alternative will occur.

Step 2: Choose the best among the worst outcomes. The decision-maker selects the alternative with the maximum value among all minimum payoffs. Hence, \[ \boxed{\text{Maximin criterion}} \] is the correct answer. Therefore, \[ \boxed{(C)} \] is the correct answer.